The City Chic Collective Ltd (ASX: CCX) share price has come under pressure on the day of its annual general meeting.
In morning trade the fashion retailer’s shares are down 1.5% to $2.70.
What did City Chic reveal at its annual general meeting?
At the meeting City Chic provided investors with a trading update for the first 20 weeks of FY 2021.
According to the release, the company’s comparable sales are up 18.7% financial year to date excluding its temporary Victorian store closures.
Including these temporary store closures, its comparable sales growth would have been 7.9%.
While these figures include its online business, which continues to grow strongly in the ANZ market, management notes that its stores (excluding Victoria) also delivered positive comparable sales during the 20 weeks.
Management also provided an update on its Avenue business. It advised that Avenue continues to trade well. It was included in its comparable sales from mid-October, with positive comps for the four weeks up to the annual general meeting.
One side of the business not performing so positively was its City Chic website in the United States. While its performance continues to improve, it is still down versus last year. Though, City Chic product sales on the Avenue website are delivering growth for the City Chic brand in the United States.
Another work in progress is its gross margin. Management notes that its gross margin has improved significantly since the peak of COVID disruption but is still slightly lower than the corresponding period last year.
No guidance was given for the remainder of the year, but City Chic’s CEO, Phil Ryan, appears cautiously optimistic on the future.
He commented: “As our customers have adopted a more casual style, we have been able to facilitate the expansion of these categories through our agile design process and supply chain. This expanded range has reduced our reliance on the dress business to drive growth, and as dress sales recover into FY22 and beyond, we expect this to provide incremental growth as we maintain the casual share of wallet we have captured.”
“We are just about to enter the critical trading period that includes Black Friday, Cyber Monday and Christmas and we feel comfortable with our stock position. Given the large trading months in this quarter for all our geographies, our earnings in the first half traditionally outweigh earnings in the second half of the financial year,” he concluded.
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